Econ 1011 - Lecture 13

Usingthebroomfactoryexamplefrombefore 2

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Unformatted text preview: utput
such
that
marginal
revenue
equals
 marginal
cost
at
that
output.
(see
table)
 1. For
a
PC
firm
MR
=
P
 2. Therefore:
Choose
output
such
that
P
=
MC

 a. Be
careful
not
to
choose
MC
too
low
 b. P
must
cross
MC
from
above,
right
to
left
 
 
 Output
 (#)
 c. If
there
is
a
lower
level
where
P=MC,
that
is
likely
 to
be
the
profit
minimum.
 3. If
Q
set
below
where
P=MC
then
P
>
MC
and
an
 additional
unit
of
output
raises
revenue
by
P
but
raises
 cost
(MC)
by
less
therefore
profit
rises.
 4....
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This note was uploaded on 09/30/2013 for the course ECON 1011 taught by Professor Irenefoster during the Fall '11 term at GWU.

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